The Trefis price estimate for HP’s stock is $50.66 compared to a market price of $39.67 as of the close on Thursday.
We estimate that HP’s Printers & Ink Cartridges business constitutes 24% of the company’s stock price. HP’s printer business makes money primarily through the sale of ink and toner supplies for its printers.
HP’s market share in printers has gone from 35% in 2005 to 40% in 2008. We expect HP’s share gains to continue over the forecast period due to HP’s strong relationships with large business buyers and its traction with consumers through its PC business which has also gained share in recent years.
However, HP’s printing business is continuously at risk of commoditization. The company has been able to maintain share and some pricing power in this market through printing technology designed to limit the use of low cost (non-HP) ink and toner supplies, with HP printers. As low cost printers and printing supplies become increasingly capable, HP’s printing market share along with its printing profit margins will be at risk.
Within HP’s content on our platform, you can see how much HP would be impacted if gains in HP Market Share were to be reversed.
